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|제목 : U.S. and EU Police Each Other's Companies||글쓴이 : eu-center|
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U.S. and EU Police Each Other's Companies
Apr 30, 2015 By Leonid Bershidsky
Apple has always denied there was anything illegal about the corporate structure it set up in Ireland to radically cut the tax it pays on non-U.S. operations. Now it has warned investors that a European investigation may have a material effect on its future earnings. The probe is part of an evolving practice, in which the U.S. and the European Union do each other's law enforcement.
Apple's tax arrangement was based on a discrepancy between Irish and U.S. tax laws. In Ireland, a company's domicile is where it is run from; in the U.S., it's where it's is incorporated. Thanks to this quirk, Apple's Irish subsidiaries, which receive most of the company's overseas profits, have had essentially no domicile for tax purposes. The Irish authorities didn't mind that: Apple employs thousands of people in the country and pays some taxes on its Irish-related business. For Ireland, something is better than nothing.
For years, Apple filings to the U.S. Securities and Exchange Commission mentioned this arrangement, but never described it in detail or warned it could lead to adverse consequences.
Apart from the Irish state aid case involving Apple, the EU is also investigating the tax rulings obtained by Amazon in Luxembourg and Starbucks in the Netherlands. That investigation has the potential to expand to more European jurisdictions and U.S. companies, especially tech and pharmaceutical ones able to reduce taxable profits by diverting intellectual property royalties to shell companies.
Essentially, the EU, which has no influence on its members' fiscal policies except by policing state aid, is doing Uncle Sam's job. It's mainly U.S. taxes that these companies are trying to avoid, as they accumulate profits overseas for "indefinite reinvestment." In some cases, the U.S. authorities have moved to close down the stratagems: Financier George Soros, for example, faces a tax bill of $6.7 billion to be paid by 2017, on client fees that were reinvested in his hedge funds through Irish vehicles. When it comes to tech giants, though, the U.S. hasn't done much to stop them from using Dutch, Irish and other EU-basis tax schemes to lower their tax bills.
It's probably fair that, in a globalized world, each regulatory system plays to its strengths; it's just another facet of the international division of labor. It would be idealistic to expect countries to adopt similar enough rules to create a level playing field for multinationals, eliminating both the glaring loopholes and nasty surprises. The current set-up, however, could degenerate into political tit-for-tat exchanges.
Given how hard the U.S. comes down on European banks, for example, the EU may be stricter than necessary when dealing with the likes of Apple, Amazon and Google (now under an antitrust investigation in Europe).